Kinross provides global update on COVID-19 response planning and financial position (All dollar figures are unaudited and in U.S. dollars)
Kinross provides global update on COVID-19 response planning and financial
position
(All dollar figures are unaudited and in U.S. dollars)
TORONTO, April 01, 2020 -- Kinross Gold Corporation (TSX:K; NYSE:KGC) (“Kinross” or the “Company”) continues to
implement comprehensive and proactive measures to respond to the COVID-19 pandemic. While the Company cannot predict
the future impact of the pandemic on its global operations, all Kinross mines continue to operate and have not been materially
impacted to date (see Appendix A).
The Company has taken preventative actions and put contingency plans in place at all sites that prioritize and protect the
health and safety of employees, their families and host communities. In late January 2020, the Company created a cross-
functional COVID-19 Task Force to initiate planning and preparation, following the advice of health authorities and expert
medical and travel advisers. Since then, numerous initiatives have been implemented in response to the pandemic. These
include:
• rigorous and extensive social distancing practices;
• remote working where possible;
• increased medical preparedness;
• banning non-essential business travel;
• continuous promotion of hygienic practices recommended by health authorities;
• increased cleaning and disinfection, and;
• increased support to employees and communities.
Kinross continues to also work closely with host governments and local health authorities to ensure proper protocols are
followed during the ongoing crisis.
Business continuity plans have been prepared and implemented for each site to mitigate operational and supply chain risk. To
help mitigate operational risks, the Company has implemented screening, isolation and quarantine procedures for all
employees arriving at Kinross’ remote camp-based sites, adjusted rotation schedules and is limiting site access, among other
measures. In the supply chain area, mitigation measures include initiating a process to increase stocks of key consumables
to at least three months on hand, ordering additional critical spares, assessing potential disruptions, and identifying alternative
sources of supply.
Kinross continues to maintain a strong financial position and liquidity. As a precautionary measure to protect against
economic and business uncertainties caused by the pandemic and subsequent government actions, Kinross drew down $750
million from its $1.5 billion revolving credit facility on March 20, 2020. The Company does not currently plan to deploy the funds
given its strong financial position. As of March 31, 2020, Kinross has more than $1 billion in cash and cash equivalents,
reflecting cash flow from operations in Q1 2020 offset by payments related to the Chulbatkan acquisition, a tax payment in
Brazil, a semi-annual interest payment for Kinross’ senior notes, and repayment of the amount drawn on the credit facility at
December 31, 2019.
As previously planned, Kinross has submitted a drawdown notice for $200 million on the $300 million Tasiast project financing
facility. The first funds are expected in mid-April 2020. The financing, which was signed on December 16, 2019, is an asset
recourse loan with the IFC (a member of the World Bank Group), Export Development Canada, ING Bank and Société
Générale.
At this time, the Company has total debt of approximately $2.5 billion, and net debt 1 of less than $1.5 billion. The Company
has no debt maturities until September 2021. Despite the Company’s strong financial position, Kinross continues to plan for
the potential impact of a wide range of outcomes on its financial position and balance sheet, including reviewing discretionary
capital expenditures.
Kinross has also continued to assess the potential impacts of the pandemic on its 2020 production and cost guidance. While
the crisis has had no material impacts on the Company’s operations to date, Kinross has decided to withdraw its full-year
2020 guidance. The Company believes this is the prudent approach given the pandemic’s significant impact on the world
economy, the implications of government-mandated constraints on financial, commercial and business activities, and the
potential for further business disruptions and global health impacts. Favourable fuel prices and foreign exchange rates are
expected to provide offsets to some of the incremental costs resulting from Kinross’ contingency measures. The Company will
continue to target the safe delivery of its operating plans, notwithstanding the potential impacts of the global crisis.
For the first quarter of 2020, the Company expects gold sales to be slightly lower than production due to the impacts of the
global crisis on timing of sales and metal shipments. Kinross is actively managing its metal shipments to mitigate impacts of
the suspension, or risk of suspension, of operations at several refineries. Alternate transportation channels have been secured
and further contingency plans are being prepared. Kinross’ preliminary Q1 2020 production, which has been impacted in part
by crisis-related contingency measures, is expected to be approximately 560,000 Au eq. oz., with sales of approximately
540,000 Au eq. oz. Preliminary cost of sales per ounce sold for Q1 2020 is expected to be at the higher end of the original
annual guidance range.
“During these challenging times, I would like to thank all our employees around the world who have stepped up and worked
long hours under difficult circumstances to keep our people safe and our sites operating. I would also like to thank our host
governments, including Mauritania and Russia, for supporting our Company as we work to manage and respond to this
unprecedented global crisis,” said J. Paul Rollinson, President and CEO. “We are continuously looking at implementing more
precautionary and mitigation measures across our Company to protect our employees, their families and our host
communities. We are also focused on ensuring our business continuity plans are sound, and that we are as prepared as
possible in this rapidly evolving crisis.”
President and CEO J. Paul Rollinson will today participate in a fireside chat with Greg Barnes, Managing Director, Head of
Mining Research at TD Securities Inc., to discuss Kinross’ global response to the COVID-19 crisis. The link to the fireside
chat will be available at 3 p.m. ET today in the Events and COVID-19 sections at www.kinross.com.
For more information on the Company’s COVID-19 response, visit: https://www.kinross.com/news-and-investors/covid-19/
About Kinross Gold Corporation
Kinross is a Canadian-based senior gold mining company with mines and projects in the United States, Brazil, Chile, Ghana,
Mauritania, and Russia. Kinross maintains listings on the Toronto Stock Exchange (symbol:K) and the New York Stock
Exchange (symbol:KGC).
Media Contact
Louie Diaz
Senior Director, Corporate Communications
phone: 416-369-6469
Investor Relations Contact
Tom Elliott
Senior Vice-President, Investor Relations and Corporate Development
phone: 416-365-3390
Appendix A: Kinross operations and projects (As of March 31, 2020)
Operation Location Status Government decree
Round
Mountain
Nevada,
U.S.A. Operating Mining considered essential as part of State of Nevada regulations
issued on March 20, 2020.
Bald
Mountain
Nevada,
U.S.A. Operating Mining considered essential as part of State of Nevada regulations
issued on March 20, 2020.
Fort Knox Alaska,
U.S.A. Operating Mining considered essential as part of State of Alaska declaration on
March 27, 2020.
Paracatu
Minas
Gerais,
Brazil
Operating Brazil's Ministry of Mines and Energy has declared mining essential.
Tasiast Mauritania Operating
Government of Mauritania and the Company have discussed their
common desire to ensure the continuation of operations. Tasiast
exempted on a case-by-case basis from government limits on
domestic people movement.
Kupol -
Dvoinoye
Chukotka,
Russia Operating Mines not required to close as part of five day national work stoppage
(commenced March 26, 2020).
Chirano Ghana Operating
Mining employees excluded in new act passed by Government of
Ghana on March 20, 2020 that gives power to limit movement of
people in times of disaster.
Project Location Status Government decree
Fort Knox
Gilmore
Alaska,
U.S.A. Ongoing Mining considered essential as part of State of Alaska declaration
on March 27, 2020.
Tasiast 24k Mauritania Ongoing
Government of Mauritania and the Company have discussed their
common desire to ensure the continuation of operations. Tasiast
exempted on a case-by-case basis from government limits on
domestic people movement.
Chulbatkan Khabarovsk,
Russia Ongoing Mines not required to close as part of five day national work
stoppage (commenced March 26, 2020).
La Coipa
Restart
Atacama
region, Chile Ongoing Mining projects not required to halt as part of Government of Chile’s
declaration on March 22, 2020.
Cautionary statement on forward-looking information
All statements, other than statements of historical fact, contained or incorporated by reference in this news release including,
but not limited to, any information as to the future financial or operating performance of Kinross, constitute “forward-looking
information” or “forward-looking statements” within the meaning of certain securities laws, including the provisions of the
Securities Act (Ontario) and the provisions for “safe harbor” under the United States Private Securities Litigation Reform Act
of 1995 and are based on expectations, estimates and projections as of the date of this news release. The words “continue”,
“estimate”, “expect”, “goal”, “guidance”, “initiate”, “mitigate”, “plan”, “potential”, “target” or variations of or similar such words
and phrases or statements that certain actions, events or results may, could, should or will be achieved, received or taken, or
will occur or result and similar such expressions identify forward-looking statements. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that, while considered reasonable by Kinross as of the date
of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies.
The estimates and assumptions of Kinross referenced, contained or incorporated by reference in this news release, which
may prove to be incorrect, include, but are not limited to, guidance for production, production costs of sales forecasts for the
Company meeting expectations; the continued operation of the Company’s mines; the Company’s financial position; the
availability of the Company’s Tasiast project financing; as well as the various assumptions set forth herein and in our
Management’s Discussion and Analysis (“MD&A”) for the year ended December 31, 2019, and the Annual Information Form
dated March 30, 2020. Known and unknown factors could cause actual results to differ materially from those projected in the
forward-looking statements. Such factors include, but are not limited to: operational or financial impacts resulting from the
COVID-19 outbreak, the Company’s financial position; the availability of the Company’s Tasiast project financing; fluctuations
in the spot and forward price of gold or certain other commodities (such as fuel and electricity) and in currency exchange
rates; the effectiveness of preventative actions and contingency plans put in place by the Company to respond to the COVID-
19 pandemic, including, but not limited to, social distancing, a non-essential travel ban, business continuity plans, and efforts
to mitigate supply chain disruptions; changes in national and local government legislation or other government actions,
particularly in response to the COVID-19 outbreak; escalation of travel restrictions on people or products; adverse changes in
our credit ratings or access to credit and capital markets; and reductions in the ability of the Company to transport and refine
doré. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the
purpose of providing information about management’s expectations and plans relating to the future. All of the forward-looking
statements made in this news release are qualified by this cautionary statement and those made in our other filings with the
securities regulators of Canada and the United States including, but not limited to, the cautionary statements made in the
“Risk Analysis” section of our MD&A for the year ended December 31, 2019 and the Annual Information Form dated March 30,
2020. These factors are not intended to represent a complete list of the factors that could affect Kinross. Kinross disclaims
any intention or obligation to update or revise any forward-looking statements or to explain any material difference between
subsequent actual events and such forward-looking statements, except to the extent required by applicable law.
Other information
Where we say “we”, “us”, “our”, the “Company”, or “Kinross” in this news release, we mean Kinross Gold Corporation and/or
one or more or all of its subsidiaries, as may be applicable.
Source: Kinross Gold Corporation
1 Net debt is a non-GAAP financial measure defined as “Long-term debt and credit facilities” less “Cash and cash
equivalents.”